Supreme Court Opens Section 9 Door for Losing Arbitral Parties – With a Cautionary Note

In a landmark ruling that resolves a decade-long rift among High Courts, the Supreme Court has declared that even parties who lose in arbitration can seek interim relief under Section 9 of the Arbitration and Conciliation Act, 1996, after the award but before enforcement. Justices Manmohan and Manoj Misra, in Home Care Retail Marts Pvt. Ltd. v. Haresh N. Sanghavi (2026 INSC 415), emphasized a higher bar for such relief, advising courts to proceed with "care, caution and circumspection."

This decision, delivered on April 24, 2026, arose from a batch of appeals including SLP(C) Nos. 29972/2015, 11139/2020, and 26876/2014, stemming from commercial disputes where losing parties faced dismissed Section 9 petitions.

The Arbitration Battleground: From Tribunal Loss to Courtroom Fight

The core dispute traces back to commercial contracts gone sour. In the lead case, Home Care Retail Marts Pvt. Ltd. (appellant) lost arbitral claims against Haresh N. Sanghavi (respondent). Similar fates befell parties in companion appeals. Post-award, these "unsuccessful" entities filed Section 34 challenges to set aside the awards and parallel Section 9 applications for interim safeguards – like asset preservation – fearing dissipation during pendency.

Bombay, Delhi, Madras, and Karnataka High Courts shut the door, citing Dirk India Pvt. Ltd. v. Maharashtra State Electricity Generation Co. Ltd. (2013 SCC OnLine Bom 481), which limited post-award Section 9 to "fruits of the award" for winners only. Telangana, Gujarat, and Punjab & Haryana High Courts disagreed, allowing access if bona fide risks loomed.

This judicial patchwork forced Supreme Court intervention on the key question: Is a Section 9 petition maintainable post-award by a party without an enforceable award?

Appellants' Push: "Remediless Without It"

Additional Solicitor General K.M. Nataraj and Senior Advocate Abhimanyu Bhandari argued fiercely for openness. They slammed Dirk India as flawed, noting that Section 34 set-asides revive contracts, per Section 43(4) 's limitation exclusion for fresh arbitration. Why deny interim protection meanwhile?

They highlighted the 2019 Amendment curbing tribunal powers post-award and recent rulings like Gayatri Balasamy v. ISG Novasoft Technologies Ltd. (2025 SCC OnLine SC 986), empowering courts to modify awards – not just uphold or scrap them. "A party" in Section 2(h) means any arbitration agreement signatory, they stressed, citing Firm Ashok Traders v. Gurumukh Das Saluja ((2004) 3 SCC 155). Section 9's broad "subject matter" scope outstrips Section 36's narrow stay, preventing injustice like asset sales during challenges.

Respondents' Defense: "Finality First"

Senior Advocate Dr. Menaka Guruswamy countered, urging arbitral finality. Post-award, only winners have "fruits" to protect, she said, echoing Dirk India and Supreme Court nods in Hindustan Construction Co. Ltd. v. Union of India ((2020) 17 SCC 324). Unsuccessful parties must stick to Section 34/36 stays with equity-balancing conditions – not detour to expansive Section 9, risking "pandora's box" of appeals under Section 37 and diluted minimal intervention ( Section 5 ).

She warned of contextual reading: "A party" adapts by stage, per Nussli Switzerland Ltd. v. Organizing Committee Commonwealth Games (2014 SCC OnLine Del 4834).

Court's Razor-Sharp Reasoning: Literal Words, No Judicial Rewrite

Dismissing modulation of "a party," the Bench invoked literal interpretation canons from R.S. Nayak v. A.R. Antulay (AIR 1984 SC 684). No success qualifier exists in Section 9 or 2(h) – varying it post-award creates anomaly.

India's Act exceeds UNCITRAL Model Law's Article 9 by adding post-award access, sans party limits. Sections 34/36 target awards; Section 9 shields disputes/assets. Gayatri Balasamy upends Dirk 's binary premise, allowing modifications or de novo arbitration.

Even purposively, scenarios like fraud-tainted awards or continued pre-award injunctions (e.g., bank guarantees) demand flexibility. Hindustan Construction isn't binding precedent here, as obiter.

Key Observations Straight from the Bench

"The meaning of the expression ‘a party’ cannot be contextually modulated or varied depending upon the outcome of the arbitral proceedings. Such modulation would amount to judicial amendment of the statute." (Para 33)

"Sections 34 as well as 36 provide remedies against an award or a stay thereof, whereas Section 9 ensures protection of the subject matter or the amount in dispute. An unsuccessful party cannot secure protection of its claim under Section 34 or Section 36 ." (Para 42)

"The threshold for grant of interim relief will be higher in the case of an unsuccessful party in arbitration seeking such relief." (Para 60)

As LiveLaw reported, this aligns with pro-access High Courts while cautioning against routine grants.

A Balanced Verdict: Access Yes, But Earn It

The Court overruled restrictive High Court views: "Judgments of the Bombay, Delhi, Madras, and Karnataka High Courts... do not lay down good law." Telangana, Gujarat, Punjab & Haryana stances prevail.

Final holding (Para 62): "Any party to an arbitration agreement, including an unsuccessful party in arbitration, may invoke Section 9 of the Act at the post-award stage. However, the Courts would be well advised to exercise care, caution and circumspection ..."

One appeal disposed; others listed for merits. Practically, expect stricter prima facie scrutiny ( Essar House Pvt. Ltd. v. ArcelorMittal Nippon Steel India Ltd. , (2022) 20 SCC 178) – balance of convenience, irreparable harm – for losers. This bolsters equity without eroding arbitral speed, potentially averting asset-stripping in volatile challenges.